Oil giant faces order to clean up Hawke's Bay site

Oil giant Chevron is facing legal action after failing to clean up a petrol leak that entered groundwater from a Napier service station and is drifting beneath other properties.

In what is believed to be a precedent-setting case, Hawke's Bay Regional Council is seeking a court order to force Chevron - which uses the brand name Caltex in New Zealand - to remediate the contaminated groundwater. The council also claims the company may have tried to sell the service station to reduce its liability.

An unknown amount of petrol leaked from the Caltex service station in Hyderabad Rd in 2007. Two "plumes" of petrol were found in groundwater, with one extending beneath a neighbouring property and believed to be drifting toward residential properties.

Documents obtained by The Dominion Post under the Local Government Official Information and Meetings Act show the council was shocked to discover in mid-2010 that Chevron had done nothing to clean up the contamination.

The council says Chevron had given numerous undertakings that the contamination would be addressed, but this did not occur.

It has now gone to the Environment Court seeking an enforcement order. If granted, this would legally require the company to undertake the work.

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In an affidavit to the court, the council said Chevron's position appeared to be that, because the groundwater was not used as drinking water, there was no breach of the Resource Management Act.

It is suggested that Chevron also said it would not undertake remediation until the entire plume had been assessed and that it preferred "natural attenuation" - leaving it to break down naturally - as a means of dealing with the contamination. This was not acceptable to the council, according to the affidavit.

When approached by The Dominion Post, a Chevron spokesman said the matter was confidential and "therefore you are on notice that Chevron requires you to maintain strict confidentiality of the same, and you are not at liberty to disclose this confidential information to the public or any third party".

Among the documents is an email to Chevron from a man looking to buy the service station in November. When he asked about the contamination, he was told by a Chevron employee that there were no problems with the site.

The employee said the contamination was the result of a "steel pipeline failure in 1998" and "there haven't been any ongoing issues since the fibreglass system was installed".

In an email, the employee said it was "not practical to physically remediate the site" and that the contamination would "gradually clean itself up over time . . . [bugs present in the soil clean up the contamination]".

There were no risks to human health and the regional council "have not asked us to do any remediation work or to apply for a discharge consent".

When the council contacted the employee, he said he was "completely unaware" of the council's discussions with Chevron over remediation. The council affidavit said the council "found that very difficult to accept, given the history of contact between the council and Chevron's agents".

In the affidavit, the council said it was "concerned that Chevron is attempting to sell the property, and subsequently reduce its liability, without informing the potential buyer that the liability a contaminated site comes with [sic]. In fact the email to [the man] indicates an attempt to mislead the buyer".

The council said it believed that, historically, hydrocarbon contamination by service stations appeared to be treated differently to other cases of contamination of soil or groundwater.

The affidavit suggested this could be because councils were "reluctant to engage in a legal process with large petrochemical companies as these companies had deep pockets".

"This enforcement order, if granted as requested, would probably create a precedent and the council is acutely aware that Chevron's interest in this matter extends beyond the cost of the requested remediation."

The council also said it believed it was in Chevron's interests not to respond to the council's requests "as the longer this takes to resolve, the more likely it is that remediation is not practical".

While there were no known bores registered near the site, hydrocarbon contamination may be a potential risk to future groundwater users, according to a report compiled for Chevron by URS New Zealand in 2008.

Raymond Young, owner of the commercial property next door to the service station, said he was concerned at the contamination but had not heard anything from the company for several years.

If the groundwater was contaminated, he expected Chevron to clean it up, he said.